Will global economy be Affected by The Japan Disaster ?
After the disastrous earthquake and tsunami in Japan on March 11, 2011, the immediate concern was disaster relief and saving lives. As that effort continues, other questions have begun to be raised, including, “Will the global economy be affected by the disaster in Japan?”
While global stock markets did show a downturn immediately after news of the disaster hit, that is not an indication of the longer term effects of the disaster on the global economy. While there is a risk of a Japanese recession affecting the world economy, economists believe that the reconstruction effort will help the Japanese economy recover fairly quickly, sparing any lasting negative effects on the rest of the world.
The region most affected by the disaster does contain manufacturing and agricultural production, and manufacturing plants further away from the immediate disaster zone have shut down temporarily as well, which could have an effect on the global economy since high-value components such as computer chips and auto parts are produced in Japan. A halt in production in Japan could cause temporary delays in production worldwide since factories around the world may need Japanese components and supplies to operate. These delays are uncertain at this time, but experts predict delays should be fairly short, as the components are produced elsewhere in the world.
The problems surrounding the Japanese nuclear plants are escalating and this has left may wondering how big an impact will this event have on the radiation levels not only in Japan but worldwide. Many are now seeing that maybe an alternative energy source is now necessary. What that means is that cost concerns like those over solar panel prices can no longer be a shackle.
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